London-listed Tullow Oil today said that it had agreed a new $1.7bn (£1.2bn) loan agreement with its banks, giving the exploratory firm liquidity of $900m.
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The loan comes as the company continues to negotiate with its creditors over financing its $2.4bn debt pile.
Shares in the firm rose 5.5 per cent on the back of the news.
Last year Tullow warned that it could be heading for a cash crunch in January due to the decline in oil demand caused by the pandemic.
Today’s new loan determination, which still needs to be approved by a majority of Tullow’s banks, was reduced from $1.8bn due to results of the last six months of production.
The firm is currently undergoing a revamp after a challenging couple of years for the company.
Back in September it fell to a $1.3bn half year loss after writing down $1.4bn due to changes in its price outlook caused by Covid.19.
But even before the pandemic the firm had been struggling, with former chief executive Paul McDade departing after Tullow posted a $1.7bn full year loss for 2019.
New boss Rahul Dhir is targeting $1bn in portfolio sales in order to raise cash.